Fundamental Comment

Oil retreats ahead of US crude inventories report

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U.S. crude prices slipped from a three-week high on Thursday, ahead of a report that may show U.S. crude stockpiles soared last week.

Crude oil futures retreated from a peak of $64.07 a barrel to trade lower at $63.65, set for its first daily drop in four sessions.

Brent crude slumped to $67.12 a barrel after hitting a three-week top at $67.88 on Monday.

The American Petroleum Institute’s weekly report due later in the day may show U.S. crude inventories have surged 2.7 million barrels last week.

On Wednesday, the EIA government report may signal U.S. crude stocks soared by 0.79 million barrels in the week through February 23.

Inventories have fallen by more than 100 million barrels over the course of the past 12 months, marking the lowest level in three years.

However, U.S. output stabilized at its record high of 10.27 million barrels per day in the week through February 16.

Still, there is uncertainty whether the rising U.S. output would offset OPEC efforts or the cartel’s production cuts would balance the market.

The U.S. dollar traded higher versus a basket of major currencies at 89.78, ahead of head of Federal Reserve Chairman Jerome Powell’s first congressional testimony later in the day.

Oil prices managed to recover from a low of $58.06 a barrel, the lowest level in seven weeks, despite the dollar’s attempts to rebound from three-year lows.

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